BetterHelp shared customers’ sensitive health data, FTC says

The online counseling service BetterHelp has agreed to return $7.8 million to customers to settle with the Federal Trade Commission for sharing health data it had promised to keep private — including information about mental health challenges — with companies including Facebook and Snapchat. The proposed FTC order announced Thursday also limits how the California-based company may share consumer data in the future.

BetterHelp said the settlement was not an admission of wrongdoing and that the behavior for which it was sanctioned is standard for the industry.

Samuel Levine, director of the FTC’s Bureau of Consumer Protection, however, said BetterHelp betrayed consumers’ most personal health information for profit.

“When a person struggling with mental health issues reaches out for help, they do so in a moment of vulnerability and with an expectation that professional counseling services will protect their privacy,” Levine said in a statement. Levine called the proposed order “a stout reminder that the FTC will prioritize defending Americans’ sensitive data from illegal exploitation.”

The enforcement action follows a similar one on Feb. 1 in which telehealth and prescription drug discount provider GoodRx Holdings was assessed a $1.7 million penalty for sharing users’ personal health data with Facebook, Google and other third parties without their consent.

The FTC has made it clear of its intent to crack down on the trafficking in sensitive health data by businesses not strictly classified as health care providers and thus not covered by HIPAA, the federal privacy rules that govern the health care industry.

BetterHelp provides online counseling, including services geared toward Christians, teens and the LGBTQ community. Customers interested in its services fill out questionnaires that ask for sensitive mental health information such as whether they have experienced suicidal thoughts and if they are on medication. They are then matched with counselors.

During the signup process, customers were promised BetterHelp would not use or disclose their personal health data except for limited purposes such as to provide counseling, the FTC said.

The company nevertheless revealed data including email and IP addresses and questionnaire information to Facebook, Snapchat, Criteo, and Pinterest for advertising purposes, the FTC said in its complaint. It also accused BetterHelp of misleading customers and the public in 2020 by falsely denying news reports that it had revealed customers’ personal data to third parties.

Under the proposed order, BetterHelp will provide partial refunds for customers who used the service from Aug. 1, 2017 until the end of 2020, the FTC said.

BetterHelp called the datasharing practices for which it was sanctioned “industry-standard practice” that is “routinely used by some of the largest health providers, health systems, and healthcare brands.”

“Nonetheless, we understand the FTC’s desire to set new precedents around consumer marketing, and we are happy to settle this matter with the agency,” it added in a statement on its website.

million, according to market research firm IBISWorld. Shoe polish sales in 2022 totaled 27.3 million units, down 29% compared with 2019, according to figures from Nielsen, a sign of the changes brought on by the pandemic.

Nisan Khaimov, who owns the Penn Station stand, said his stand would shine 80 to 100 shoes each workday before the pandemic. Now it’s between 30 to 50 on Tuesday to Thursday, and even fewer on Mondays and Fridays. Hybrid work is hurting his business.

“Until people come back to work, the problems will not be solved,” said Khaimov, who benefits from commuters traveling in and out of New York City who can’t get their shoes shined where they live. “And it’s not good for landlords and for tenants also like us. So, we’re waiting. But eventually it will go back to normal, we hope. But when we don’t know.”

Rory Heenan, 38, an accountant in Philadelphia, said that as a young boy he would take the train with his father on his way to work one Friday each month and watch him get a shoeshine.

“I would just sit here as a a little guy, you know, observing,” he said. “And here I am, you know, 30 years later, doing the same thing. So, it’s certainly something that’s passed down over time.”

Across town, in the corridor between the subway and The Port Authority bus terminal, Jairo Cardenas is also feeling the pinch. Business at Alpha Shoes

Repair Corp., which he’s run for 33 years, is down 75% compared with prior to the pandemic. He’s down to one shoeshiner, from the three he employed before the pandemic. His shoeshiners used to shine 60 or 70 shoes a day. Now a good day is 10 to 15 shines.

Cardenas’ landlord gave him a break on rent, but he’s still struggling, and has seen several other shoeshine stores in the area close. Still, he is noticing an uptick in people returning to work and hopes business slowly returns to normal by the spring.

Shoe repairs typically bring in more money than shines. At David Mesquita’s Leather Spa, which operates five shoe repair and shoeshine businesses, including two in Grand Central, the bulk of the business comes from shoe, handbag and garment repair. But shoeshines are still a key offering to draw people in to Leather Spa locations since they’re not available everywhere.

Pre-pandemic, Leather Spa had four shoeshine chairs in Grand Central and six shoeshiners rotating, who would do about 120 shines a day. Nowadays, there are three shoeshiners who do 40 or 50 shines on the best days.

But Mesquita is seeing people slowly coming back. His December 2022 shoeshine numbers were up 52% compared with December 2021. Mondays and Fridays are less busy than the middle of the week due to office workers’ hybrid schedules.

“Traffic is slowly coming back in, we’re seeing the commuters come in and everything, but we’re still not back 100% of what we were,” Mesquita said.

Mesquita said shoeshining is not something that will go away completely.

“I think it’s just a little luxury,” he said. “People like to treat themselves, you know, whether it’s once a week or twice a week or, you know, once every two weeks. It’s just nice.”

Besides big city transit hubs,

airports are one of the few remaining spots to reliably get a shoeshine. Jill Wright owns Executive Shine, which operates shoeshine stations in the Denver and Charlotte airports. Her business was devastated when air travel shut down.

When airports started to reopen, they were empty. The only people getting their shoes shined were pilots and crew, she said, which kept her company in business. Now, Wright says her businesses is still just 35% of what it was in 2019.

“Travel has really changed,” she said. “Companies are starting to come back but not to the degree that they were.”

Business travel is rebounding, but the U.S. Travel Association predicts 2023 business trips will still be down 10% from 2019, and will return to pre-pandemic levels in 2024. Meanwhile, people are dressing differently when they travel. Instead of traveling in workwear, some travelers that still want to get their shoes shined will travel in tennis shoes, pull out their dress shoes to get a shine, and then put them back in their bag, Wright said.

Like Mesquita, Wright expects demand for shoeshines will never go away completely, because it’s more than just a transactional service. A shine is a moment of connection between two people, particularly at an airport where there is a lot of rushing around and stress, she said.

“People come for a shoeshine, but they also come for the connection and for the conversation and just for a place to relax and talk and be seen and feel some compassion,” she said.